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Inside Washington (01/07/2011)

* WASHINGTON (1/10/11)--Some lenders have taken issue with the recently released terms of the Small Business Lending Fund (SBLF), saying that restrictions will limit participation in the program (American Banker Jan. 7). The SBLF is a $30 billion fund that encourages lending to small businesses by providing capital to qualified community banks with assets of less than $10 billion. Among the concerns expressed are that the program will not consider Small Business Administration (SBA) loans as small-business lending; that the fund will have volatile interest rates; and that financial institutions will be forced to find matching funds for money they receive through the program. That National Association of Government Guaranteed Lenders supported the creation of the fund when President Barack Obama first suggested it last year, but the group pulled its support after learning that SBA 7(a) loans and other government-guaranteed loans would not count as small business loans under the SBLF. Under the terms issued by the Treasury, banks can apply for funds at an initial 5% dividend rate that decreases as they conduct more small-business lending. But if the guaranteed portion of SBA loans does not count, SBA lenders are less likely to take part in the program, according to Tony Wilkinson, president of the association. Wilkinson said this policy discriminates against SBA lenders … * WASHINGTON (1/10/11)--Organizational issues are preventing the House Financial Services Committee and the Senate Banking Committee from holding hearings and carrying out their agendas at the start of the new congressional term (American Banker Jan 7). Rep. Spencer Bachus (R-Ala.) has been unable to move into the House committee office because it is still occupied by outgoing chairman Rep. Barney Frank (D-Mass.). Bachus also cannot schedule hearings or conduct other committee business because Democrats have yet to organize their subcommittee membership. A House Democrat indicated the caucus might organize within the next week. In the Senate, the Banking Committee cannot convene hearings because Sen. Tim Johnson (R-S.D.) is not expected to be officially named committee chairman until later this month or early February. Also, the panel’s budget has not been determined, hampering Johnson’s ability to hire staff … * WASHINGTON (1/10/11)--In his first testimony before the new Congress, Federal Reserve Chairman Ben S. Bernanke said there is “increased evidence” that a self-sustaining economic recovery is taking hold. Bernanke said real consumer spending rose at an annual rate of 2.5 % in the third quarter, and available indicators suggest it likely expanded at a somewhat faster pace in the fourth quarter. Businesses also have begun replacing aging equipment after delaying such investments during the downturn. Overall, the pace of economic recovery seems likely to be moderately stronger in 2011 than it was in 2010, according the Fed chairman. He also defended the Federal Reserve’s recent policy of buying government bonds to support the economy, including its intention to purchase an additional $600 billion in Treasury securities by the end of the second quarter. Bernanke also advised Congress of the increased danger of failing to reign in the federal budget deficit. “Diminishing confidence on the part of investors that deficits will be brought under control would likely lead to sharply rising interest rates on government debt and, potentially, to broader financial turmoil,” Bernanke said … * WASHINGTON (1/10/11)--The Small Business Administration (SBA) has unveiled a newly designed website. The new site features the launch of SBA Direct, a new web tool that allows small business visitors to personalize their browsing experience according to their business type, geography and needs. SBA Direct offers information on running a business, including the steps involved in getting started, business growth strategies, and how to stay compliant with current laws and regulations. Visit www.sba.gov … * WASHINGTON (1/10/11)—The National Economic Council will be chaired by Gene Sperling, who was appointed to the position by President Barack Obama late last week. Sperling led the NEC during the late Clinton administration and has worked with the Obama administration as it developed small business and tax policies during the past two years. Obama on Friday called Sperling “a public servant who has devoted his life to making this economy work -– and making it work specifically for middle-class families.” National Credit Union Administration (NCUA) Chairman Debbie Matz in 2009 suggested lifting the credit union member business lending cap to Sperling after he requested input on how to spur small business growth…